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Chan v. Wells Fargo Advisors, LLC

United States District Court, D. Hawai'i

August 24, 2015

PAUL CHAN, Plaintiff,

Page 1046

          For Paul Chan, Plaintiff: Elizabeth Jubin Fujiwara, Joseph T. Rosenbaum, LEAD ATTORNEYS, Fujiwara and Rosenbaum, LLLC, Honolulu, HI.

         For Wells Fargo Advisors, LLC, Defendant: Alyson Alexis Smith, Darren E. Nadel, LEAD ATTORNEYS, PRO HAC VICE, Littler Mendelson, PC, Denver, CO; Kenneth J. Mansfield, LEAD ATTORNEY, McCorriston Miller Mukai MacKinnon LLP, Honolulu, HI; Maria Ronchetto Harrington, LEAD ATTORNEY, Littler Mendelson, P.C., Irvine, CA.

Page 1047


         Susan Oki Mollway, Chief United States District Judge.


         This arises out of an alleged statement by a financial advisor's assistant to a supervisor that the financial advisor had made an illegal trade. Whether the financial advisor decided that he no longer wanted to work with the assistant as a result of that complaint or whether the decision to move the assistant to a different financial advisor was made for other legitimate, nondiscriminatory reasons is the question at heart of this lawsuit.

Page 1048

          Ultimately, the assistant allegedly suffered great anxiety and was unable to work. After the assistant had exhausted his two years of unpaid medical leave, the company terminated him. Whether the company was required to grant the assistant more leave as a reasonable accommodation is another issue before the court.

         The company, Defendant Wells Fargo Advisors, has moved for summary judgment.

         With respect to Count I of the First Amended Complaint, asserting a termination in violation of public policy, the court grants Wells Fargo summary judgment, as this portion of the motion is unopposed. Plaintiff Paul Chan fails to show that he was terminated in violation of public policy.

         With respect to Count II, asserting a violation of Hawaii's Whistleblowers' Protection Act, section 378-62 of Hawaii Revised Statutes, the court denies the request for summary judgment, determining that there are questions of fact as to whether Chan suffered an adverse employment action because he purportedly reported an illegal trade to his employer.

         With respect to Count III, asserting a claim of intentional infliction of emotional distress, the court grants summary judgment in favor of Wells Fargo, determining that Hawaii's workers' compensation provisions provide the exclusive remedy for work-related injuries. If appropriate, however, emotional distress damages may be sought as a remedy in connection with other causes of action.

         With respect to Count IV, asserting a claim of punitive damages, the court grants summary judgment in favor of Wells Fargo because no independent claim for punitive damages exists. However, if appropriate, punitive damages may be sought as a remedy in connection with other causes of action.

         Finally, with respect to Count V, asserting a claim of disability discrimination, the court denies Wells Fargo's request for summary judgment, determining that there are issues of fact as to whether Wells Fargo engaged in the required interactive process to determine whether it could make any reasonable accommodation that would have allowed Chan to return to work.


         In 1998, Chan was hired as a client associate by Herman Ching, a senior financial advisor at Prudential Securities. See Decl. of Paul Chan ¶ 3, ECF No. 52-6, PageID # 985; Decl. of Herman Ching ¶ 6, ECF No. 47-17, ECF No. 756. Chan coordinated Herman Ching's clients and appointments for 15 years. Chan Decl. ¶ 10. Every month, Herman Ching gave Chan an envelope containing between $100 and $1,000 to personally thank Chan. In other words, this money came from Herman Ching, not the company. Id. ¶ 12; Videotaped Depo. of Paul Chan at 105-06, ECF No. 47-2, PageID #s 393-94; Videotaped Depo. of Herman Ching at 28, ECF No. 52-2, PageID # 918; Herman Ching Decl. ¶ 17, ECF No. 47-17, PageID # 758. Herman Ching also gave Chan gifts for special occasions like Christmas or his birthday, and whenever Ching wanted to reward him, such as when Ching had a good month. See Chan Depo. at 119, ECF No. 47-2, PageID # 397.

         Prudential Securities eventually became Wells Fargo. Chan Decl. ¶ 7.

         In May 2009, Chan became the primary client associate for Eric Ching, Herman Ching's son. See Herman Ching Decl. ¶ ¶ 11, 20, ECF No. 47-17, PageID # 757-59. At the same time, Kay Yamasaki became Herman Ching's primary client associate. Id. ¶ 20, ECF No. 47-17, PageID # 759.

Page 1049

          Eric Ching continued his father's practice of giving Chan personal cash gifts to thank Chan for his work. These gifts came from Eric Ching's personal funds, not the company's, see Decl. of Eric Ching ¶ 8, ECF No. 47-18, PageID # 763, and were less frequent than those from Herman Ching, see Chan Decl. ¶ 13, ECF No. 52-6, PageID # 986; Chan Depo. at 119, ECF No. 47-2, PageID # 397.

         Herman Ching, Eric Ching, Chan, and Yamasaki all reported to Thomas McCarthy, a Senior Vice President--Complex Manager for Wells Fargo. Herman Ching Decl. ¶ 13, ECF No. 47-17, PageID # 757.

         In June 2012, one of Wells Fargo's clients called, concerned that her required minimum IRA distribution was late. Herman Ching told Chan that the client was unhappy. See Chan Depo. at 134-35, ECF No. 47-2, PageID # 407-08. On Friday, June 22, 2012, Chan processed the client's request for the required minimum distribution. See Chan. Decl. ¶ 22, ECF No. 52-6, PageID # 987. In so doing, Chan noticed that funds were missing from the client's IRA account. Id. ¶ 23. Chan says that Eric Ching must have violated the law by trading with the client's funds without permission. Chan concludes this based on Eric Ching's statement to Chan that, seeing a cash balance in the client's account, he had made investments in what Eric Ching called a " discretionary account." Id. ¶ ¶ 25-28, ECF No. 52-6, PageID # 988. In his deposition, Chan was asked whether he knew whether Eric Ching had permission to make the trade. Chan indicated that he did not know, but had to assume that Eric Ching had such permission. See Chan Depo. at 148-49, ECF No. 47-2, PageID # 409-10.

         Chan says that Yamasaki cancelled the paperwork he prepared to get the client paid. Chan Decl. ¶ 30, ECF No. 52-6, PageID # 988. Yamasaki had processed the same paperwork, and one of the two payment requests had to be cancelled. See McCarthy Decl. ¶ 12, ECF No. 47-19, PageID # 770. Chan was livid about this. He says that, because he had been verbally and physically harassed by Yamasaki, causing him to avoid talking with her from about 2005, he went to the copy room and ranted. Id. ¶ 31. Not knowing that anyone else was in the copy room, Chan complained, " What the hell is she doing? Why is she bulldozing people? She successfully chased away her daughter and her husband cheated on her." Id., PageID # 989. Another staff member overheard Chan and reported his statements to Yamasaki. Id. Yamasaki then complained about Chan's rant to Wells Fargo's human resource department. See id. ¶ 38, PageID # 990.

         The next working day, Monday, June 25, 2012, Herman Ching told Chan that human resources was involved and that Chan had to leave the office and not come back until told to do so. Chan Decl. ¶ 34, ECF No. 52-6, PageID # 989. Chan was later told by Eric Ching to return to work the next day for a meeting with Herman Ching and McCarthy. Id. ¶ 41, PageID # 990.

         On Tuesday, June 26, 2012, Chan met with Herman Ching and McCarthy separately. Chan Decl. ¶ 42, ECF No. 52-6, PageID # 990. Chan admitted what he had said in the copy room. Id. Chan says he explained to Herman Ching and McCarthy what had happened before he went on his rant, including describing the possible unauthorized trade. Id. ¶ ¶ 42-44, PageID # 991. McCarthy, on the other hand, says Chan only complained about Yamasaki's conduct, not Eric Ching's. See McCarthy Decl. ¶ 15, ECF No. 47-19, PageID #s 770-71. This is consistent with Eric Ching's statement that he was unaware that Chan had complained about him. See Eric Ching Decl. ¶ 14, ECF No. 47-18, PageID # 765.

Page 1050

          On July 11, 2012, McCarthy issued Chan a formal warning for having vented in the copy room. See ECF No. 47-20, PageID # 774. In that warning, McCarthy explained that he was moving Chan's work area " to improve the environment and reduce involvement with the other parties involved." Id. In other words, McCarthy separated Chan and Yamasaki. See McCarthy Decl. ¶ 16, ECF No. 47-19, PageID #s 771 (" I decided to move Mr. Chan's desk away from Ms. Yamasaki's desk. I thought that if they had more physical distance between their work stations, it would ease the tension between them." ).

         Eric Ching says that, by late July or early August 2012, he had decided that he wanted a new client associate. See Decl. of Eric Ching ¶ 11, ECF No. 47-18, PageID # 764. He explained,

I wanted a Client Associate with more regular working hours and the ability to meet my needs in terms of completing work in the time period I expected the Client Associate to complete it. I also wanted a Client Associate who took me seriously even though I was younger and less experienced than other Financial Advisors in the Group; and, despite the fact I am Herman Ching's son.

Id. According to Eric Ching, by August 2012, Chan's work performance had worsened. Ching says that, for example, Chan no longer completed work as quickly and sometimes did not do his paperwork at all. Id. ¶ 12, PageID # 764-65. Eric Ching says that it is common to reassign client associates among financial advisors. Id. ¶ 18, ECF No. 47-18, PageID # 766.

         Chan disputes Ching's statements about Chan's unreliability. Chan says that, because he could only carry over 5 days of vacation time, he left early on some days to use his vacation. He says he would stay whenever Eric Ching needed him. See Chan Decl. ¶ ¶ 63-64, ECF No. 52-6, PageID # 994. He recalls taking time off to be with his sick mother before she died and then taking bereavement leave. Id. ¶ ¶ 65-68. Chan denies that he was performing poorly, pointing out that Herman Ching praised his work in 2012. Id. ¶ 72-75, PageID # 995. Herman Ching described Chan's work in 2012 as " excellent." See Videotaped Depo. of Herman Ching at 48, ECF No. 52-2, PageID # 920.

         Eric Ching talked about changing assistants with his father, who recommended a change to McCarthy. See Decl. of Herman Ching ¶ 22, ECF No. 47-17, PageID # 759. It was McCarthy who made the decision to transfer Chan to another advisor. Id. ¶ 26, PageID # 760; Chan Decl. ¶ 51, ECF No. 52-6, PageID # 992.

         On August 15, 2012, Herman Ching told Chan that Eric Ching no longer wanted to work with Chan. See Chan Decl. ¶ 49, ECF No. 52-6, PageID # 992; Decl. of Herman Ching ¶ 26, ECF No. 47-17, PageID # 760. Chan then became the client associate for Thomas Lau, another financial advisor. Wells Fargo says that Chan's pay and bonuses from Wells Fargo remained the same. Herman Ching Decl. ¶ 29, ECF No. 47-17, PageID # 760. But Chan says that working for Lau, who was about to retire, was not as prestigious as working for the Chings. Chan Decl. ¶ 82, ECF No. 52-6, PageID # 996. For his part, Herman Ching described the transfer as a good opportunity for Chan, not a demotion. He said that, although Lau was 84 years old, he was still working and had Chinese clients constituting 25% to 30% of his clients. Because Chan spook Chinese, Herman Ching thought Chan could help grow Lau's business. See Ching Depo. at 119-20, ECF No. 52-2, PageID # 927.

         Herman Ching says that Chan's workload also remained the same, as he also began working for Herman Ching more. Id. ¶ 29. Although paragraph 61 of the

Page 1051

First Amended Complaint alleges that the transfer to Lau caused Chan's pay to fall by over 19%, ECF No. 40, PageID # 260, Chan explained in an interrogatory answer that this reduction resulted from losing his " supplemental pay . . . from no longer working with Eric Ching." ECF No. 47-16, PageID # 748. Any reduction in pay was thus related to the loss of " tokens of appreciation" or personal gifts from Eric and Herman Ching. See Chan Decl. ¶ 79, ECF No. 52-6, PageID # 996.

         Although Chan was told that he would be losing his $400 per paycheck bonus as a result of the move, see Chan Decl. ¶ 78, ECF No. 52-6, PageID # 996, he actually received the bonus until he stopped working in September 2012. See Chan Depo. at 130, ECF No. 52-4, PageID # 954. Chan says that the bonuses were to continue only temporarily while he was transitioning to working for Lau. Chan Depo. at 129, ECF No. 52-4, PageID # 953. Because Chan stopped working before that transitional period ended, he did not lose out on any paycheck bonuses. The record is not clear as to whether Lau could have asked Wells Fargo to maintain the bonus of $400 per paycheck.

         According to Chan, he was " devastated" by the news that Eric Ching no longer wanted to work with him. Chan says he took time off, returning to work on August 21, 2012. When he returned, both Herman and Eric Ching allegedly " blasted" him for having jeopardized a good client. Chan Decl. ¶ ¶ 54-55, ECF No. 52-6, PageID # 992-93. Chan says he was then told that he no longer had access to Herman Ching's and Eric Ching's accounts. Id. ¶ 56.

         Chan reports that he then " went on leave from work due to stress from work that resulted in me having major depression and I went out on work comp." Chan Decl. ¶ 85, ECF No. 52-6, PageID #s 996-97. Chan says that he took advantage of a Wells Fargo policy allowing employees to take 24 months of leave. Id. ¶ 88. Chan began his unpaid medical leave of absence on September 28, 2012. See Decl. of Terricia Gaines ¶ ¶ 8-9, ECF No. 47-21, PageID # 778.

         On or about October 8, 2012, Wells Fargo wrote to Chan to inform him that it had received information that he was on a leave of absence because of an on-the-job injury or illness. See ECF No. 47-23, PageID # 789.

         On or about December 28, 2012, Wells Fargo wrote to Chan to say that he had exhausted his leave under the Family Medical Leave Act. The letter mentioned that Chan's employment was not ending and that Chan was eligible for benefits through the balance of his approved leave, which was a maximum of 24 months. See ECF No. 47-24, PageID # 791.

         Apparently, Chan requested medical leave. In response, on or about July 31, 2013, Wells Fargo sent Chan a letter stating, " To qualify for an approved, unpaid Medical Leave, please review and complete the steps below," including submitting a Medical Certification Form. ECF No. 47-25, PageID # 795.

         On or about August 9, 2013, Chan's physician, Dr. Pien, sent Wells Fargo the requested Medical Certification Form, stating that Chan had " anxiety attacks at work, significant anxiety when thinking upon returning there, in Sept., 2012, daily depression with almost daily poor appetite, insomnia, low energy, difficulty making decisions." ECF No. 47-26, ...

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